Key takeaways
- Verify T-12 line-by-line.
- Expense ratio 45–55% normalized.
- Debt service coverage 1.30+ minimum.
- Operator quality beats market.
- Build investor relations capability.
Core concepts
T-12 verification
Trailing 12 months operating statements + bank statements + tax returns.
Expense ratios
Normalized to 45–55% — most sellers undershoot.
Capital stack
Agency, bridge, syndication, JV — match to deal.
Operator alpha
Same asset, different operator: 200 bps NOI delta.
Step-by-step framework
- 1T-12 + bank reconciliation.
- 2Expense normalization.
- 3Capital stack selection.
- 4Investor pipeline.
- 5Quarterly reporting standards.
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Common mistakes to avoid
- Seller-supplied numbers.
- Optimistic value-add timelines.
- Wrong debt product.
Frequently asked questions
Smallest worth syndicating?
$2M+ purchase typical.
Best debt product?
Agency for stabilized; bridge for value-add.
Investor minimum?
$50–100k typical.
Acquisition fee?
1–3% standard.
Action checklist
- ☐T-12 verified.
- ☐Expenses normalized.
- ☐Capital stack defined.
- ☐Investor pipeline.
- ☐Quarterly reporting plan.
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